How to Start a Carpet and Upholstery Cleaning Business

Start a carpet and upholstery cleaning business by following these 10 steps:

1. Plan your Carpet and Upholstery Cleaning Business
2. Form your Carpet and Upholstery Cleaning Business into a Legal Entity
3. Register your Carpet and Upholstery Cleaning Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Carpet and Upholstery Cleaning Business
6. Get the Necessary Permits & Licenses for your Carpet and Upholstery Cleaning Business
7. Get Carpet and Upholstery Cleaning Business Insurance
8. Define your Carpet and Upholstery Cleaning Business Brand
9. Create your Carpet and Upholstery Cleaning Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your carpet and upholstery cleaning business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Carpet and Upholstery Cleaning Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a carpet and upholstery cleaning business?

You could either buy a franchise from an existing operation or start an independent service. According to the trade association Institute of Inspection Cleaning and Restoration Certification (IICRC), franchising fees can run from about $20,000 to $50,000. That doesn’t cover equipment, cleaning solutions or transport vehicles, but does include include training and the support of a known brand. For example, if you represent yourself as a Stanley Steemer company, customers will be familiar with your brand and perhaps have used Stanley Steemer services in the past. If they were satisfied then, you’ll get the credit even if you had no association with that previous company.

Whether you buy into an existing franchise or go on your own, your startup costs will include the following:

• Carpet cleaning equipment, which includes a commercial rug cleaner with attachments and holding tank for wastewater, and long hoses to water supply
• Cleaning solvents, for which a startup supply can cost several hundred dollars
• A van for transport of equipment and possibly for operation
• Business licenses and insurance (consult your attorney and independent insurance broker to see what you’ll need in these areas)
• Website development and/or other means of promoting your business, including van signage and logo (Consider contacting the graphic design department of your nearby university or community college for talented students who can design logos or create websites at a much lower cost than through an ad agency or even freelance experienced designers.)

The equipment and supplies can run from several thousand dollars to $30,000 for a new truck-mounted system. All of the supplies and equipment can be bought used online much less expensively at sites such as this. A used van can cost as little as $5,000.

What are the ongoing expenses for a carpet and upholstery cleaning business?

Once you’ve initially bought your major equipment and transport vehicle, your ongoing expenses will mostly be cleaning supplies which you’ll find through janitorial service vendors. Shop to find the lowest prices on these commodity products. Your other ongoing expense will be payroll costs for your workforce, which will be determined at least in part on prevailing wages within your region, and gasoline for your vehicles. This cost is difficult to quantify since it involves a number of variable factors: the size and mileage and condition of the vehicle, distances within your market, numbers of jobs per day, etc.

As your business grows, you might add teams to meet growing scheduling demands. If that’s the case, you’ll eventually have to invest in additional equipment and transport vans.

Who is the target market?

Anyone who owns carpeting, rugs or upholstered furniture and wants to keep them clean is a potential customer. That’s virtually every household in America—or, more realistically, in your marketing area.

While residential cleaning is where the customer volume is, commercial customers are likelier to use your services more frequently. That’s because they have more foot traffic, so their carpets and upholstery get dirtier faster. And since their facilities are in the public eye, the decision makers are more motivated to maintain appearances. They’re also likelier to have more square footage of need, so one stop can generate more income than an average-size private home. These public spaces include office buildings, apartment buildings, shopping centers, auto showrooms, churches and other places of worship.

How does a carpet and upholstery cleaning business make money?

The business charges home residents, business owners, property managers and other customer types for cleaning services. The going rate is about 30 cents a square foot and business owners in this category try to average at least $100 an hour per visit. (The actual rate tends to range from about $75-$150 an hour.)

How much can you charge customers?

The going rate for carpet cleaning services is about 30 cents per square foot. But many customer relationships are developed from couponing or by offering contract discounts. The goal, from the business owner’s viewpoint, is to gross $75 to $150 per hour in the field.

How much profit can a carpet and upholstery cleaning business make?

Carpet cleaning businesses bill at least 30 cents per square foot and try to gross at least $100 an hour per job. Top-scale hourly is about $150. With that figure, if a single truck can stay in operation seven hours a workday, it will gross about $700 per day for 240 workdays. However, the work is seasonal in some areas of the country, so it’s not always possible to bill for 240 days. Experts expect to net anywhere from 10 percent to 50 percent pre-tax profit.

How can you make your business more profitable?

There are many additional sources of related business you can undertake. The same equipment and cleaning supplies can be used to deep-clean cars, boats and recreational vehicles. Similar supplies can be used to clean tile and grout, natural stone and even hardwood floors. And since you’re already in homes and businesses, consider expanding your service offering to include duct cleaning. Minor carpet repair and restoration and drapery cleaning services might also be extended.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your carpet and upholstery cleaning business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a carpet and upholstery cleaning business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Service Agreement

Carpet cleaning businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your carpet cleaning business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Organization, sales ability and customer dedication are key. You must be able to promote your business and sell your services, supervise your people in the field and handle complaints. You should also have patience, since employee turnover can be high. That means you’ll need to regularly train new workers and supervise them in the field to make sure the job gets done right every time.

What happens during a typical day at a carpet and upholstery cleaning business?

Your typical business day might include the following activities:

• Networking on the phone, online or in person to find customers and encourage additional business from them
• Training and supervising your work crew, which often means accompanying them on-site to inspect their work and help them overcome obstacles
• Handling the cleaning operation yourself if you have few or no employees, you overbook or workers fail to show up as scheduled
• Ordering cleaning supplies
• Handling the day-to-day business of operating your own company: paying bills, invoicing customers and staying current on taxes, insurance and other issues

What are some skills and experiences that will help you build a successful carpet and upholstery cleaning business?

Your planning skills are critical. Start by writing a business plan as a strategic blueprint. It should answer the following questions: What services will you offer? Who is your market, both geographically and by customer type? Who are your competitors and how is your company different? Where will you get your equipment and supplies, and at what cost? What must you charge to be profitable on every job?

You must also be adept at making sales, maintaining work schedules and managing a workforce if you have one. And finally, you must be able to maintain your poise under pressure and to be committed to keeping your customers happy. A satisfied customer will continue to call for your services until they’re no longer satisfied.

What is the growth potential for a carpet and upholstery cleaning business?

According to business research firm IBIS World, the industry’s annual growth rate was projected at 1.9 percent between 2011 and 2016. The firm also pointed out that rising per-capita income is likely to increase business and that customers use such services every year or two, on average. (Many commercial users are much more frequent customers.)